How to navigate a property market downturn

Housing market data is, by its very nature backward looking. Data released by the Halifax recently paints a picture of a market that’s still rising. Prices rose again in April 2022 for the tenth consecutive month. It’s the longest run of consistent rises since 2016. And prices are 10.8 per cent higher than they were in the same month in 2021.

And yet the cost-of-living crisis continues to escalate. Whether it’s energy or fuel prices, inflation, or the rising cost of food, it’s all beginning to bite. And yes, interest rates have risen too. At the beginning of May the Bank of England raised rates to 1 per cent with an expectation that there will be further rises to come. All this means that buyers are significantly more inhibited than they were a year ago. Although some economists predict a property market adjustment, downturn and in some cases crash, I’d personally take the view that the fortunes of this market will be determined by interest rates.